Moncloa Maintains That It Will Collect 14% More In Personal Income Tax Than Before Covid

The Government trusts the Accounts for next year to a record collection not seen even before the coronavirus crisis. The Ministry of Finance and Public Function, led by María Jesús Montero, plans to collect 100,132 million euros from the Personal Income Tax (IPRF) .

In a context of economic recovery that is still present, this collection would mean, according to the projections of the General State Budgets for 2022, an increase of 14%more than what was collected in the last year before the pandemic (2019), when the State entered 86,892 million euros into the public coffers. In addition, the Treasury plans to exceed the income tax collection for this year by 7,000 million, which will stand at 93,803 million, 6.6% above the collection obtained in 2020.

On the other hand, regarding the collection of Corporation Tax (IS), the Government expects to enter 24,477 million euros, which would represent an increase of 3% compared to the last pre-Covid year, 2019.

Then, the income for Corporation Tax was 23,733 million, almost 700 million less than what was projected for the next fiscal year. It should be remembered that, according to data from the ministry itself, 2019 already represented a collection 4.4% lower than in 2018, taking into account the most optimistic economic situation. About 2021, when Companies accounted for 21,889 million, the increase would be more than 2,500 million euros.

70,000 fewer companies
To collect a hypothetical 3% more in Companies compared to 2019, the Treasury will have to face a fall of 70,000 companies affiliated with Social Security , according to data from José Luis Escrivá’s own ministry. In December 2019 there were 1,489,000 affiliated companies, a figure that contrasts with the 1,418,000 companies affiliated with Social Security collected in the latest data, from September 2021.

Regarding the new figures, Minister Montero has recognized an adjustment to the Global Minimum Tax of 15% for multinationals. The Treasury now estimates that it will have an impact of just under 50 million in 2022. Montero trusts that for next year there will already be a European directive “that transposes this consensus” reached within the OECD.

According to the Yellow Book of the General State Budgets (PGE) 2022, tax revenues in 2021 will amount to 214,995 million euros, which will represent an increase of 10.8 percent compared to 2020. The figure is more than 2,100 million euros. registered in 2019.

According to the Government’s forecasts, this year total income from personal income tax will already stand at 93,803 million, 6.6% above the collection obtained in 2020.

Moncloa foresees that the tax base, gross household income, will increase by 4.2% in 2021. In the first half of the year they grew by 6.3%, although it is being compared with the part most affected by the confinement. In general, all the components will show a substantial improvement in 2021, more intense in those that last year had a worse performance (salaries of the private sector – and in particular SMEs – personal capital income, rental income and company income) .

On the other hand, the Budgets contemplate that income from Corporation Tax for 2021 will amount to 21,889 million, which means 38% more than in 2020. “The two reasons that explain the strong growth of the tax are, on the one hand, the increase in profits (with a sharp fall in 2020) and, on the other hand, the decrease in returns to be made in 2021 compared to those paid “, points out the Yellow Book.

Moncloa foresees that the growth of the profits of the companies in 2021 will be close to 15%, while the consolidated tax base of the Corporation Tax would rise more, around 19% -in 2020, the rates were -29, 4% and -18.4%, respectively. With information available until March (the only one of a fiscal nature until the second installment payment is presented in October), profits grew by 35.6% and the base by 23.3 percent. The difference between the two figures was the consequence of the extraordinary results due to a merger of two banking groups.

“The decline in profits and base in 2020 from the first moments of the state of alarm explains a part of the high growth in the first quarter, but the results also exceed those of 2019”, indicate the PGE.

Categorized as News

Leave a comment

Your email address will not be published. Required fields are marked *